MANAGEMENT CORP v. AHMAD (2006)

Appeal from a final judgment of the Civil Court of the City of New York, Kings County (Maria Ressos, J.), entered October 28, 2005.   The final judgment, insofar as appealed from as limited by tenants' brief, dismissed tenants' counterclaims for, inter alia, rent overcharge and breach of the warranty of habitability, and denied tenants' application for attorney's fees, in a nonpayment summary proceeding.

Final judgment, insofar as appealed from, modified by reinstating tenants' counterclaims other than their application for attorney's fees and remanding the matter for all further proceedings on these counterclaims;  as so modified, affirmed without costs.

In this nonpayment summary proceeding, landlord sought arrears in excess of $10,000 and tenants interposed counterclaims for, among other things, breach of the warranty of habitability and rent overcharge.   Tenants also sought attorney's fees.   On an adjourned trial date, landlord's petition was dismissed without prejudice on the ground that landlord was not prepared to proceed, tenants' counterclaims were in effect dismissed without prejudice, and tenants' request for attorney's fees was denied on the ground that there was no prevailing party.

 Since tenants were prepared to proceed upon their counterclaims, the counterclaims should not have been dismissed.   We note that tenants were entitled to assert their claim of breach of the warranty of habitability either by way of action or counterclaim, and their right to assert this claim was not dependent on the claim by landlord for rent arrears (Park West Mgt. Corp. v. Mitchell, 47 N.Y.2d 316, 329, 418 N.Y.S.2d 310, 391 N.E.2d 1288 [1979] ).   Similarly, since tenants had not previously commenced an overcharge proceeding before the Division of Housing and Community Renewal, they were entitled to assert their overcharge claim by way of action or counterclaim, and their right to assert this claim was also independent of landlord's claim for arrears (Crimmins v. Handler & Co., 249 A.D.2d 89, 90-91, 671 N.Y.S.2d 469 [1998];  see Kew Hills, LLC v. Stelmack, N.Y.L.J., June 20, 2001 [App. Term, 2d & 11th Jud. Dists.];   Oziel v. Tineo, N.Y.L.J., Mar. 2, 1999 [App. Term, 2d & 11th Jud. Dists.] ).   Accordingly, we modify the final judgment by providing that tenants' counterclaims, other than their application for attorney's fees, are reinstated and by remanding the matter for all further proceedings on the counterclaims.   Inasmuch as tenants are not entitled to attorney's fees at this juncture based on the dismissal without prejudice of landlord's petition (see Elkins v. Cinera Realty, 61 A.D.2d 828, 402 N.Y.S.2d 432 [1978];   Sacchetti v. Rogers, 2003 N.Y. Slip Op. 51259[U], 2003 WL 22220143 [App. Term, 1st Dept.] ), we leave the court's denial of tenants' application for attorney's fees undisturbed.